Question

Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the first process. During November, the first process transferred 765,000 units of product to the second process. Additional information for the first process follows. At the end of November, work in process inventory consists of 204,000 units that are 50% complete with respect to conversion. Beginning work in process inventory had $440,895 of direct materials and $151,725 of conversion cost. The direct material cost added in November is $2,950,605, and the conversion cost added is $2,882,775. Beginning work in process consisted of 78,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 78,000 were from beginning work in process and 687,000 units were started and completed during the period. Required: For the first process: 1. Determine the equivalent units of production with respect to direct materials and conversion. 2. Compute both the direct material cost and the conversion cost per equivalent unit. 3. Compute the direct material cost and the conversion cost assigned to units completed and transferred out and ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.)

For the first process:
1. Determine the equivalent units of production with respect to direct materials and conversion.

2. Compute both the direct material cost and the conversion cost per equivalent unit.

3. Compute the direct material cost and the conversion cost assigned to units completed and transferred out and ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.)

Answer 1

	Victory Company
	Production Cost Report
		Actual Units
	Calculation of Physical UNITS:
	Units in beginning inventory	78,000
	Units started during the period	765,000
	Units to be accounted for	843,000
		Actual Units
	Units Completed and Transferred	639,000
	Units in ending inventory	204,000
	Total accounted for	843,000
		Actual Units	Equivalent Units
			Material	Conversion Cost
	Units Completed and Transferred	639,000	639,000	639,000
	Units in ending inventory	204,000	204,000	102,000
1)	No. of Equivalent Units	843,000	843,000	741,000
	Costs:
			Material	Conversion Cost	Total
	Costs in beginning inventory		440,895	151,725	592,620
	Cost added during the year		2,950,605	2,882,775	5,833,380
	Total cost to account for		3,391,500	3,034,500	6,426,000
	Equivalent Units from above		843,000	741,000
2)	Cost per equivalent unit		4.02	4.10
			Material	Conversion Cost	Total
3)	Cost Accounted for
	Units completed and transfer		2,570,781	2,616,796	5,187,577
	Units in ending inventory		820,719	417,704	1,238,423
	Total Cost Accounted for		3,391,500	3,034,500	6,426,000